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TWU stops talks with Virgin over CEO sack rumour

written by Adam Thorn | October 14, 2020

The TWU has sensationally suspended negotiations with Virgin Australia over new working terms for its members until it receives clarification that chief executive Paul Scurrah will not be fired.

The union scrapped a scheduled meeting at midday on Wednesday and wrote a letter to new owners Bain Capital seeking “clarification” on the situation.

However, Scurrah himself dismissed the rumours only this morning and added that they’ve been ongoing for quite a while.

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It comes after he exclusively told the Australian Aviation Podcast earlier this month that Bain is “a really good owner” and said the relationship between the investors and the existing management team is like “a good marriage”.

The TWU, which claims to also have the backing of the ASU, VIPA, and AMWU, said firing Scurrah could also mean the airline moves away from being a ‘hybrid’ and slides towards being a low-cost carrier, which would likely result in more job losses.

The two sides are attempting to negotiate new enterprise agreements underpinning terms and conditions, which have expired.

“The ink is not yet dry on the sale of Virgin and it appears that private equity firm Bain Equity are behaving as we feared: ripping out the heart of Virgin and reneging on promises to the Australian people,” said TWU national secretary Michael Kaine. “We are suspending negotiations on enterprise agreements while we seek clarification on these developments.

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“For our part, we are engaged in talks in good faith. If the plan and scope of the airline as outlined in August by Bain Capital has already been scrapped then this is a serious betrayal that must be addressed.”

The union will shortly send letters, seen by Australian Aviation, to Prime Minister Scott Morrison and Bain chief Mike Murphy asking for clarification on the situation.

“We are deeply concerned by the media reports today that Virgin CEO Paul Scurrah has been sacked and that the airline is now shifting towards a low-cost model,” reads one. “We seek urgent clarification on the following: Paul Scurrah’s position and his future at the airline. Are there any plans for Mr Scurrah to depart his role?

“Is there any shift in the commitments Bain Capital announced in August ahead of Virgin’s sale, namely a commitment to retaining 6,000 workers, retaining regional operation Vara, tiered cabin classes, airport lounges and the airline’s international arm?

“The number of aircraft Bain plans to put into operation? Despite a promise of 75 aircraft there are just 56 ready for flying. We seek an urgent meeting to discuss these matters with you.”

However, Paul Scurrah said at The Australian Financial Review’s National Infrastructure Summit on Wednesday that “there’s been ongoing speculation for some and I’ve never been in the habit of commenting on speculation”.

Earlier this month, on the Australian Aviation Podcast, Scurrah revealed that the reborn business’ new strategy will see it become a “high-quality, value airline”.

He insisted the new-look airline would emerge from the pandemic with “75 plus” aircraft and offer a network “not too dissimilar” to what it had last year.

He also described Bain as “a really good owner” and said the relationship between the investors and the existing management team is like “a good marriage”.

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10 Comments

  • Mark

    says:

    If Bain do not continue with Scurrah and let him go forward with the plan his team presented, this would be a disgusting act of corporate betrayal.

  • Jason

    says:

    Didn’t take the TWU long to show their true colours.

    Bain will do what it wants to, as it now owns it. Its’ monies’ are being used.
    They’ll have who THEY want as boss, probably Jane Hrdlicka.

    They could LIQUIDATE it also, if the unions’ keep being pains in the @#$. And if they do that, no-one’s got a job! The workers’ will then know how the unions’ blew it for them.

  • Paul B

    says:

    The unions should be grateful that Virgin has survived. Whatever the new owners decide to do with the airline is up to them not unions or governments. The situation has drastically changed since bidfing started. You now have draconian stayes closing borders which impacts on travel and tourism. So all companies must rethink their business model. If that what Bain does it is the entitlement.

  • White Shadow

    says:

    Bain are a PE firm, why would believe any “assurances?” Always get it in the contract terms and conditions, otherwise it’s just words… Bain would have a 3 year plan to spin the business and at least double their money. Wake up people!!!

    They will say it’s business, it’s not personal… not to them it isn’t, but to many Irvin Australia employees it is totally personal.

  • Shane

    says:

    You can’t trust any anyone on ‘their’ word anymore.

  • Mark

    says:

    A disgusting act of corporate betrayal if Bain do in fact renege on promises made to staff and sack Scurrah.

  • Peter

    says:

    You forgot to add that Bain were contacted yesterday by Fairfax and refused to confirm if he was staying on…. and since it broke in the media , Paul has gone to ground also refusing to comment. Several other senior executives on his inner circle have been quietly fired as well. Something is definitely going on.

  • Nick

    says:

    “The ink is not yet dry on the sale of Virgin and it appears that the Transport Workers Union are behaving as we feared”… Or did I misread that quote?

  • Bob

    says:

    I think the TWU and the other unions should be very careful how they conduct their negotiations with Bain. After
    experiencing the fall of Ansett when it went broke, and the second go with Fox and Lew all the staff were left with
    no employment and ten years of trying to get their entitlements
    All staff should be working hard to get Virgin back in the air and to be a profitable company. Yes terms of employment will be different to what was in the past
    Staff should remember that in theory Virgin was not a profitable concern and when the COVID 19 happened
    they had no real chance to recover Qantas is and was too strong and the plan to match them in service, flights
    and financial strength was not the correct business plan to conduct
    REX is planning to start operations on the golden triangle and they have a very good business plan and will
    have the strength to operate against Qantas

  • Vannus

    says:

    To Peter, above…..

    Ya think?

    This is just the start of what’s going to happen with Bain in control.
    Just wait until they’ve got control, after signing final paperwork on 31-10-2020.

    There’s more to come, MUCH more, & not in a good way, that’s certain.

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